AUSTIN, Texas -- Big Communications Event -- As far as John Donovan is concerned, companies have everything to gain from transforming their operations and adopting open source software. But they stand to lose plenty if they don't.

Speaking here in a keynote session Wednesday morning, Donovan, chief strategy officer and group president of AT&T Technology & Operations, expounded on the benefits of both cultural transformation and open source code. In particular, he preached the virtues of open source, both for companies that participate actively in the process and those that don't.

"It doesn’t have a downside," he said. "You can either be an active participant with contributors and do the work with an agenda or sit back and do the work. In neither case are you penalized."

In AT&T's case, Donovan estimated that the giant US telco doubled its use of open source code from 5% in 2015 to 10% in 2016. While that may seem a laudable achievement for a company that size, he is far from satisfied. "We want to go to 50% and I'm not even sure that's near high enough," he said.

Donovan, who joined AT&T in 2009 after working in Silicon Valley, contended that companies must move much faster today to adapt to rapidly changing markets, introduce new products and services and fend off new competitors. As a result, he said, there's no time any more for lengthy strategy debates, numerous use cases, multiple executive sign-offs, endless consensus-building and "hot tub parties for every decision" that needs to be made.

"You can't operate with people who want to come over the top of you, dead-serious competitors that look at your profit pools as your revenue," he said. "They'd love for us to move slow. We have to move quickly at scale. Looking at use cases that take months and accommodating all the use cases is not the way to be effective."

Noting that he barely recognizes the company he joined eight years ago, Donovan also urged others to follow AT&T's lead in transforming its corporate culture, structure and operations to move faster, take more risks and innovate more on its own. "There is not a lot of organizational courage, courage to go out and be wrong," he said. He advised his industry colleagues to "celebrate the people who succeed and dust off the ones who fail" so they can go out and try again. (See AT&T's Donovan: Women Adapt Faster Than Men and CEO Chat With AT&T's John Donovan.)

With the move towards a software-driven world, Donovan said AT&T's relationship with its vendors has fundamentally changed. Instead of being "a professional shopper" that simply buys the best products from vendors, the company has become a technology integrator and, now with the advent of SDN, is becoming more of an architect, building the products that it needs itself.

"We are doing traditionally vendor-led roles," he said. "We are now more ambitious about being willing to architect, and our supplier relationships have either gotten better or worse. None are the same. Either better because our R&D lines up or worse because they don't like where we're heading."

An enthusiastic promoter of SDN, Donovan said software solutions have enabled AT&T to stay ahead of swiftly mounting customer demand at a time when Moore's Law is running out of steam. "The only way to do better than Moore's Law is through software," he said. "That's why SDN is not a pipe dream, it's a mathematical formula. If you run out of money to buy now, you have to do it another way."

Driving home his overall message, Donovan warned conference attendees that they must transform their organizations now or risk losing out to the new breed of OTT rivals, as well as traditional competitors. He argued that telecom and cable companies are actually now "fighting a three-front war" against OTT players, each other and themselves.

"Winning two of the three is failure," he said. "For the industry to succeed but you not to transform is just as problematic."

To watch the full interview between John Donovan and Carol Wilson, click on the video below.

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— Alan Breznick, Cable/Video Practice Leader, Light Reading